Nasdaq buys Chi-X Canada

Nasdaq buys Chi-X Canada

Nasdaq is preparing to take on the Toronto Stock Exchange after striking a deal to buy alternative trading platform Chi-X Canada. Financial terms have not been disclosed.

The acquisition, slated to close in the first quarter of next year, gives Nasdaq direct access to the Canadian equities market, where Chi-X handles about 22% of the order flow of S&P/TSX Composite securities.

The ATS is being offloaded by Chi-X Global, which also operates trading platforms in Australia and Japan and is majority-owned by Nomura along with investors JPMorgan, Bank of America, UBS and Goldman Sachs.

According to Bloomberg, The firm began looking into a sale earlier this year after its owners received an unsolicited offer for the business.

Nasdaq says that the acquisition will ultimately enhance the trading experience for customers by promoting greater uniformity in technology and functionality across US and Canadian venues. Chi-X clients will be moved to Nasdaq's Inet exchange technology over the next 12 months.

Tom Wittman, EVP, global head, equities, Nasdaq, says: "We look forward to working with the Chi-X Canada clients to develop new products and services to help them better navigate the global capital markets."

Meanwhile, Toronto Stock Exchange operator TMX Group is also facing pressure from another source, with rival Aequitas filing a complaint with the Competition Bureau of Canada arguing that TMX is using its dominant position to maintain control over market data pricing.

"In the area of market data, we believe the TMX has remained, in effect, an unfettered monopoly, leveraging its market power to charge prohibitive and monopolistic prices," says Jos Schmitt, CEO, Aequitas. "Excessive market data fees have left Canadian investment dealers with no choice but to restrict the market data access given to their investment advisors and to their retail clients."

In addition to filing its complaint, Aequitas has launched a tool it claims will help break the Canadian market data "monopoly". Aequitas CMV Connect uses internal data provided by investment dealers in an effort to break free of public feeds provided by trading venues, "therefore enabling tens of millions of dollars in cost savings for the industry".

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